Brexit Forces Large Banks To Plan Shift Of 9,000 Jobs From Britain

05/08/2017

As the exodus of finance jobs starts to take shape, public statements and information from sources shows that the largest global banks in London plan to move about 9,000 jobs to the continent in the next two years, reported news agency Reuters.

Outlining plans last week for their European operations after Brexit were global banks Standard Chartered and JPMorgan. There are a growing number of lenders pushing ahead with plans to move operations from London and these banks are among them.

London's growth as a financial center could "stall" as a result of the upheaval caused by Brexit. Goldman Sachs chief executive Lloyd Blankfein said in an interview on Friday.

An indication of how they would bulk up their operations in Europe to secure market access to the European Union's single market when Britain leaves the bloc have bene given by thirteen major banks including Goldman Sachs, UBS, and Citigroup.

Banks are increasingly firming up plans to move staff and operations even though talks with financial authorities in Europe have been underway for several months.

"It's full speed ahead. We are in full motion with our contingency planning," said the head of investment banking at one global bank in London. "There's no waiting."

Britain's tax revenues could be hit if it loses rich taxpayers working in financial services although the moves would represent about 2 percent of London's finance jobs.

The rest of the population will have to pay more if top earners move, said the Institute for Fiscal Studies - a think tank focused on budget issues - in a report on Thursday.

The deal the British government strikes with the EU will determine the exact number of jobs to leave. The threat to the economy from Brexit have been exaggerated by banks, says some politicians.

However still unknown are plans of many smaller banks and of large banks such as Credit Suisse and Bank of America.

The biggest winners from the relocation plans seem to be Frankfurt and Dublin. moving the bulk their operations or opening a new office in Frankfurt are being favored by six of the 13 banks. Dublin is being favored by three of the banks.

In what was the largest potential move of any bank as a result of Brexit, Deutsche Bank said on Apr. 26 up to 4,000 UK jobs could be moved to Frankfurt and other locations in the EU.

In the next two years, plans to move hundreds of roles to three European cities have been announced by JPMorgan last week. JPMorgan CEO Jamie Dimon first estimated a figure of 4.000 before the vote and this figure is still significantly lower than the earlier figure.

According to separate reports by Oliver Wyman and Ernst & Young, a broad range from 4,000 to 232,000 is the estimate for possible finance-related job losses from Brexit.

To avoid losing nervous London-based staff as they work out how many jobs will have to eventually move, banks are treading carefully, enacting two-stage contingency plans.

And depending on what deal is eventually negotiated between the EU and Britain, this suggests that the numbers could potentially rise further.